How To Claim Federal Tax Credit for Solar or Renewable Energy

Learn About the Available Credit

The first step is easy, and by reading this guide you've already started doing it: Learn about the available credits. A taxpayer may claim a tax credit of 30% of the money spent buying and installing a system that provides renewable energy. A tax credit lowers your tax liability...and if you don't use your entire tax credit in one year, you can carry it forward to the next tax year. The tax credit for renewable energy systems on residential property is provided by 26 U.S.C. A?25D.

Buy & Install Qualifying Equipment

What is qualifying equipment? Solar-electric property, solar water-heating property (must be certified by SRCC, and at least half of energy used to heat dwelling's water must be solar), fuel cell property (must have electricity-only generation efficiency greater than 30%), small wind-energy property, geothermal heat pumps (must meet Energy Star requirements).

Fill Out and File IRS Form 5695

This is the final step - it's really that easy. The next thing you'll do to claim your tax credit is fill out Residential Energy Credits form from the IRS. The form is linked below in the additional resources / links section, but you can easily find it by googling "IRS Form 5695" or searching for the form at irs.gov. Fill it in, and file with the IRS with your tax returns.